Insights: What’s next for Permian basin electrification?
OGJ Editor-in-Chief Chris Smith speaks with Will Kernan, Power Solutions Strategy Manager for Caterpillar Oil & Gas, on why electricity demand has surged since 2021 and why traditional reliance on the grid is no longer sufficient to ensure timely project development and stable operations.
This Insights episode of the Oil & Gas Journal ReEnterprised podcast examines the rapidly growing power demands in the Permian basin region and the implications for operators, utilities, and adjacent industries.
OGJ Editor-in-Chief Chris Smith interviews Will Kernan, Power Solutions Strategy Manager for Caterpillar Oil & Gas, on why electricity demand has surged by multiple gigawatts since 2021 and why traditional reliance on the grid is no longer sufficient to ensure timely project development and stable operations.
Kernan outlines how accelerating electricity demand from both oil and gas operations and new industrial entrants—particularly data centers—has strained transmission capacity, driving greater interest in on-site natural-gas-fired generation and microgrid models.
The episode closes with a look at major grid-expansion proposals under consideration in Texas, their long lead-times, and how distributed generation, waste-gas utilization, and field-scale microgrids will shape a more flexible and resilient power ecosystem for the Permian in the years ahead.
Highlights
1:50 – Permian electricity demand surging Up ~4 Gw since 2021 to 7.5 Gw total—driven by upstream electrification, compression, midstream growth, and residential/commercial load.
3:13 – Grid is no longer the “easy button.” Utility interconnection timelines of 3–5+ years can’t match oil and gas project timelines, forcing operators to seek faster alternatives.
6:21 – Natural gas reciprocating engines, turbines Emerging as default solution, offering reliability, 24/7 operability, and rapid deployment compared with renewables or waiting on grid upgrades.
9:19 – Pipeline takeaway constraints—not gas supply—are main bottleneck Local power generation lets operators use trapped gas, reduce flaring, and shift energy transport from pipeline to transmission lines.
11:33 – AI, data center growth adds both opportunity and competition Boosting gas demand but intensifying constraints on grid access and long-lead-time equipment (e.g., turbines measured in years).
17:42 – Major grid expansions planned Vistra’s 860 Mw plants; Texas PUC’s proposed $14 billion in new transmission lines, but projects will take years and won’t fully address power needs in remote locations.
22:43 – Distributed power, microgrids will increase Including off-grid gas plants and waste-gas systems—requiring sophisticated engineering and representing a major growth area for operators.
Chris brings 32 years of experience in a variety of oil and gas industry analysis and reporting roles to his work as Editor-in-Chief, specializing for the last 20 of them in the midstream and transportation sectors.
